Data breaches are obviously a major issue which companies in every industry must face. These incidents occur with alarming frequency, despite the ever-growing awareness of the need for data protection measures. At times, it can seem as though organizations are simply incapable of preventing data breaches from happening.

However, this is not the case. In reality, it is very possible to prevent data breaches. The problem is that businesses continue to under-invest in and under-appricate these measures.

To understand why secure file transfer and other data protection initiatives are necessary, firms must first truly appreciate the consequences of data loss, theft and exposure. And to this end, it is imperative to consider the indirect fallout of such incidents, as these often constitute the greatest damage.

Direct damage
The direct damage caused by data breaches is fairly apparent, and serious. Perhaps most notably, businesses that fail to protect client information will likely be found liable for violating data management compliance standards. Regulators in every industry are tasked with ensuring that firms abide by such consumer rights-laws, and those that don't will face fines and other sanctions. Depending on the sector in question, the scope of the breach and the type of data exposed, these fines can range from thousands to even millions of dollars.

Additionally, businesses found to have been derelict in their data protection efforts will likely have to comply with additional oversight measures, such as agreeing to semiannual audits or providing data management training to personnel, both of which can undermine the organizations' productivity.

Indirect damage
As significant as these outcomes are, however, it is the indirect damage that can have a truly lasting, devastating effect on a company that has experienced a data breach.

The most significant example of this type of fallout is reputation damage. For it is not just businesses that are becoming increasingly concerned with the need to protect data - it is the general public, too. As more consumers hear about cases of identity theft and fraud following corporate data breaches, these individuals are becoming more concerned with protecting their own information. This means they are taking steps to secure their own devices and, critically, avoiding patronizing businesses that seem unable to protect customers' data.

This is where the indirect fallout of a data breach can become truly devastating. If a business's insufficient security standards lead to a data breach, that incident will almost certainly receive media attention. The bigger the breach, the greater the number of news agencies that will report on the loss.

From then on, whenever a potential customer performs an Internet search about that company, he or she is likely to come across information concerning the data breach. And this will drive countless potential customers to that organization's competitors.

This is the real reason why businesses need to take preventative steps to protect their client data. Secure file transfer solutions are a particularly valuable tool in this regard, as these resources ensure that sensitive data remains protected even as it is distributed among employees within an organization.